Santos Ltd (ASX: STO) took a battering when the storm of low oil prices made landfall.

By the company’s own admission it was unprepared for the “timing, speed and depth” of the impact, an outrageous situation for a company loaded with debt and so reliant on oil pricing for survival.

Failing to protect for a low probability event in general when you are highly leveraged to any one commodity, asset or investment is a recipe for disaster. As investing legend Joel Greenblatt would say it’s “like running through a dynamite factory with a burning match. You may live, but you’re still an idiot.”

Well Santos is still alive, but with a new Chief Executive Officer and a new operating environment the company’s management are keen to try and earn back some of the goodwill lost with investors.

Here are 3 things Santos Ltd wants you to know today:

1. New era, new company structure

Santos’ current Managing Director and CEO Kevin Gallagher took over in February this year, ushering in a new era for Santos.

And with the new leadership has come an overhaul in the company structure to refresh the focus on margins in this lower oil price environment. As well as a new Executive team at the top, the company has changed its organisational structure from a geographic focus to an asset-based model.

This is likely to give greater emphasis on key projects which, given Santos’ company-wide emphasis on project efficiency and low operating costs, makes sense.

2. Low oil prices are the new expectation

Santos remains hopeful the oil price will improve, but the company is digging the trenches for a sustained cycle of low oil prices.

We are focused on developing a business that is self-sustaining in a low oil price environment and well positioned to take full advantage of rising commodity prices in the future” – Santos’ CEO Kevin Gallagher

With gas flowing to the company’s GLNG project, the focus now turns to maintaining strong production to allow economies of scale to bring down unit production costs.

3. Santos is playing the long-game

Yes, energy prices are languishing, but Santos wants you to know it’s a marathon, not a sprint and the comany is race ready.

Santos, however, is running a long-term business. Over the past five years, our multi-billion dollar investments in PNG LNG and GLNG were made with this in mind.” Santos Chairman Peter Coates.

Oil prices, like many commodities, have a historical tendency to move in cycles, so there is a probability that the current low cash returns being generated will be offset in the future under a phase of higher energy prices, especially if low costs are maintained.

For Santos higher future cashflows may even mean renewed interest from dividend seeking investors. Until then, we have uncovered the 3-best dividends we think you should buy today.

Potentially Life-Changing Dividend Picks Just Released

The Motley Fool's renowned dividend investing guru recently revealed his newest dividend buy recommendation and short list of 3 Best Dividend Buys Now. Which means if you're reading this message right now, you're not on the list to uncover their names before they potentially go gangbusters. Simply click here to learn more about these shares.

 

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

Motley Fool contributor Regan Pearson has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.